Hey guys, Bradley tuning in. How will a global market collapse affect the Toronto Real Estate Market?
And a better question: what are some of the big risks that we face here in the GTA?
Before I get started, my name is Bradley. We do videos like this every week. Keeping up with the latest tips and tricks here in the GTA real estate market.
Make sure you hit that like and subscribe button. We’re going to continue to put out fantastic content. I’m excited for you to join us along this journey.
Let me start off by asking you guys a question. What do you think is the greatest risk that we face here in the Toronto housing market?
I’d love to hear from you guys down in the comments below. Before we get started into the entire world and how it’s going to come crashing down on us, let’s talk about us here locally in Toronto.
Now we know that we have over 100,000 people moving into our great city, the GTA on a yearly basis and there are many jobs and many opportunities here that bring people here.
A lot of things draw us, we are one of the greatest cities on the planet. But we do have this ongoing supply crisis.
And now if you follow any of my videos, there’s no doubt you know about this. If you don’t, go back to a few of the last videos, especially the last one I did on supply and demand and just the way it’s out of whack and how that all works.
It’s called Red Flag. You’re going to want to check that out to really get an appreciation for what are some of the big risks here. There are a lot of green lights in demand, but there is a very big shortage of supply that we now face.
So if there is a bubble that is to form, it would come out of that. And that’s why we’re watching it so closely. Now, if we’re going to start talking about a collapse, we’ve got to go back to what last happened,
which is the US financial collapse of 2008. Now, if you guys recall what had happened right before that was there was this ongoing price acceleration happening in the housing market in many ways. It looked a lot like what was happening in Toronto a few years back
but that was happening across the country where price was just, going over, over, over, over and was increasing at a ridiculous speed. But that’s not really what we’re seeing right now
in 2019 we’re actually seeing that they have very moderate growth of 3.6% which is still pretty good in the US but it doesn’t look at all like it did in 2008 so if a collapse were to happen, if something were to go off the rails, it would not happen.
I can’t see it taking place in the US housing market, but it could come from somewhere else. What I wanted to do is share with you some of the big risks that we do face and I wanted to lay them out for you on what I think is the biggest challenge that we face
and what could impact us the most as far as prices, as far as our economy and the Real Estate Market here in the GTA. Now the smallest risk I can see taking place here is at the national level, now we know that the currency has done quite well lately and if it continues to go up,
then we become less competitive on the global scale. And so I could see that being a potential risk. But the reason it’s so small is we are coming up to a federal election and at that time people don’t want to ruffle too many feathers.
And so I expect that to stay relatively constant and not be too big of a risk over the next year. As we move along, we start to experience more risk and as we start to look at the local government,
we start to see there’s potential areas there. I’ll give you a perfect example. In 2015 the BC government did certain things like they increased their foreign buyer tax from 15 to 20% they also changed their land transfer tax from 3 to 5%.
If you make over 300,000 and they applied a vacancy tax. Now, if any of these things were to come to the Greater Toronto area, you could expect that it would have an impact on us here as well, just like it did there.
But what is the biggest risk? When I do my analysis, I look at all these factors and I’m asked this question all the time.
I can see that the biggest risk comes from the global market. Now, that said, when we look at the US we see a pretty strong country. We see great job growth, great opportunity, great retail selling, a lot of really good indicators.
But what freaks me right out is that the market has been on a bull run for over 10 years. That is the longest in history, and so it makes me wonder how long will this party continue?
But I want to share with you some of the numbers that jump out to me that kind of speak to a risk in our market. Now when I look at the, bond market, we see a 10 year yield dropping from 3.2% in November of 2018 down to 2% in June, 2019,
which just says that the people in the bond market are a little freaked out and they’re afraid of a slowdown. We also saw a few really big bumps over the last 15 months, corrections in the S&P 500 and in the US stock market and even here in Toronto and TSX.
So we’ve seen these kind of bumps that show some shakiness there as well. But these stats really interest me. When we look at a study found in The Wall Street Journal’s economic forecast survey found that 49% of respondents thought a recession would occur in 2020
and an another 36.6. Expect one to happen in the following year. That means according to their survey, 87% of respondents believed that we would see a recession over the next two years.
So these things combined have me a little bit more concerned on a global standpoint on what is going to happen. But again, when we look back in the city of Toronto on a local perspective and here in our province,
actually as we start to see the candidates running for the federal election, we start to see a level of stability that maybe doesn’t exist around the world.
Leave your comments down below. Let me know what you think is going to happen. What are some of the biggest risks that face us here in the GTA Real Estate Market?
Make sure you hit that like and subscribe button. Continue to follow us at Watson Estates. We’re going to put out fantastic content. Take care and keep it real.

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